Help with sandwich lease option

[Ru Monsell]

I'm interested in buying subject to, and currently have on the hook a very motivated seller with a nice house. Trouble is she owes very close to what the house is worth, or maybe even more, between her mortgage balance and HELOC. I'm looking for opinions on whether a sandwich lease option agreement would be my best bet, and if so, how to structure it. The basics are a house with a FMV of about $150k, no repairs needed, a mortgage of 115K at 5.75% fixed, and $42K on the home equity loan. I appreciate your input.

Ru

[Misty W.]

With no equity and monthly cash flow, a sandwich lease would not be an option for me because there is no money in it to make up the risk that I would be stuck paying the mortgage when I didn't have a tenant for some reason. For me this would be a simple cooperative assignment where I would put the property under contract and find a tenant/buyer to assign to. I would get the assignment fee and then everything is between the owner and tenant.